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Felons Get Millions In Illegal Benefits

Millions of dollars are paid annually to felons and fugitives, largely because U.S. officials haven't matched medical and Social Security beneficiaries with law enforcement records, government investigators say.

"The Social Security and Medicare programs don't have a penny to spare for undeserving populations," said Sen. Charles Grassley, whose Senate Finance Committee will hold hearings on the payments this week. "They're already being squeezed to the limit."

Medicare, for example, paid more than $25,000 for services to an inmate convicted of killing his mother and more than $97,000 to a facility that treated nine inmates whose crimes included arson, attempted assault, breaking and entering and burglary.

The payments were made despite federal laws prohibiting most prisoners from receiving Medicare and Medicaid payments and barring fugitive felons, probation and parole violators from receiving Supplemental Security Income for needy, aged, blind or disabled

While some state or local laws include provisions that could qualify prisoners for Medicare and Medicaid, officials of those programs have not tried to determine which jurisdictions might allow the benefits.

"The government is aiding and abetting the flight of fugitive felons," said Grassley, R-Iowa. "Government programs are paying to help convicted criminals stay on the lam."

According to documents provided to The Associated Press, problems identified so far by investigators for the Department of Health and Human Services, Social Security, Congress and Louisiana show:

  • As much as $32 million in Medicare fee-for-service payments were made on behalf of 7,438 incarcerated beneficiaries during calendar years 1997 through 1999, with a strong likelihood that most of the payments violated the law.
  • Some $75 million in federal Medicaid funds were paid to Louisiana State University medical facilities for inmate care from 1997 through this year. A top Louisiana state auditor, Daniel Kyle, questioned why federal officials approved the disbursements when the Code of Federal Regulations "specifically states such costs are not allowable."
  • At least 27,700 fugitives were paid some $76 million in Supplemental Security Income benefits since August 1996 contrary to law, and the tab may increase by $30 million annually if the payments continue, the AP reported in December.
"We are concerned … because, in general, no Medicare payments should be made for services rendered to prisoners unless certain strict conditions are met by the government component which operates the prison," Acting HHS Inspector General Michael Mangano said in testimony prepared for a Senate hearing Wednesday.

In most cases, investigators learned that information to stop many of the illegal payments was available, but efforts by Medicaid, Medicare and Social Security officials to obtain the data were inadequate. In some cases, time-consumincomputer programs
would have to be devised.

HHS investigators noted the Health Care Financing Administration, which administers Medicare and Medicaid, does not have records to identify incarcerated beneficiaries.

The Social Security Administration had a list compiled from law enforcement records of 38,600 beneficiaries who were incarcerated. HSS officials are arranging to gain access to the same data to stop improper Medicaid and Medicare payments.

Kyle, the Louisiana auditor, said in prepared testimony that despite a federal rule barring Medicaid benefits to inmates, U.S. officials approved payment to the Louisiana State University facilities for treating them, after the state passed a law deeming them indigent.

He questioned how the Medicaid officials "can allow Louisiana (or any other state), simply by passing a state law, to include prisoner medical care" when a federal rule "specifically states such costs are not allowable."

Medicare and Medicaid officials said they are analyzing what it would take to determine which payments are improper and compile a database of differing state laws.

Social Security investigators found considerable problems in complying with a 1996 law making fugitive felons, along with probation and parole violators, ineligible for Supplemental Security Income payments.

The law requires Social Security officials to provide beneficiary information to law enforcement officers who inquire about individuals they identify as fugitive felons or probation-parole violators.

This information helps law enforcement agencies apprehend the violators and fugitives - while providing federal officials with names of those who should not receive benefits.

However, not all states are participating in the computer matching program. Social Security officials said they're working to expand the network.

The agency has agreements or commitments to share records from two cities, New York and Baltimore, and 22 states: Alabama, Arizona, Connecticut, Georgia, Kansas, Maine, New Hampshire, New Mexico, North Carolina, Florida, Missouri, Alaska, California,
Colorado, Kentucky, Massachusetts, Nebraska, New Jersey, Rhode Island, South Carolina, Tennessee and Washington.

©MMI, The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed

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